Analysts are Downgrading These 10 Stocks

In this article, we will take a look at the 10 stocks recently downgraded by analysts.

U.S stocks continued their downward movement on Thursday following the latest rate hike from the Federal Reserve. All three major U.S. indices momentarily rose in the previous trading session after investors misinterpreted the Fed’s statement regarding future hikes.

However, the stocks reversed their gains later in the day after Fed Chair Jerome Powell cleared that it is very early to decide on any rate cut. In fact, Powell hinted the Fed would likely go for a higher rate hike than previously anticipated.

Meanwhile, the third-quarter earnings season continued, with Nutrien Ltd. (NYSE:NTR), Lincoln National Corporation (NYSE:LNC) and Cognizant Technology Solutions Corporation (NASDAQ:CTSH), among the notable stocks, posting their results.

If we look at their price actions, shares of Nutrien Ltd., Lincoln National Corporation and Cognizant Technology Solutions Corporation dropped sharply this morning after their recent earnings.

Meanwhile, analysts also lowered their ratings for these stocks following their quarterly reports. Check out the remaining article if you want to see some more companies receiving ratings-cut from analysts.

10. Avista Corporation (NYSE:AVA)

Number of Hedge Fund Holders: 18

Mizuho lowered its ratings for Avista Corporation (NYSE:AVA) from “Buy” to “Neutral” on Wednesday, November 2. Analyst Anthony Crowdell thinks the energy company can’t do much to minimize the negative effects of inflation and interest rates in the coming years.

Crowdell added that interest rates could significantly impact the company’s profitability. He also trimmed his price target for Avista Corporation from $44 per share to $40 per share.

The downgrade came a day after Avista Corporation reduced its profit outlook for 2022 and 2023, citing elevated interest rates and operating costs. The company now expects to post consolidated earnings in the range of $1.88 – $2.08 per share for 2022 and between $2.27 – $2.47 per share for 2023.

9. Omnicell, Inc. (NASDAQ:OMCL)

 Number of Hedge Fund Holders: 19

Benchmark downgraded Omnicell, Inc. (NASDAQ:OMCL) from “Buy” to “Hold” on Thursday, November 3. The research firm was primarily moved by the company’s revised financial outlook for 2022.

Omnicell, Inc. recently lowered its 2022 adjusted earnings outlook to a range of $2.73 – $2.83 per share, down from its earlier projection between $3.85 – $4.05 per share. Revenue for the same period is now expected to come between $1.28 – $1.29 billion versus its earlier guidance of $1.39 – $1.41 billion.

Shares of Omnicell, Inc. lost more than 34 percent of their value on Wednesday, November 2, following the disappointing forecast. The stock is now down about 70 percent on a year-to-date basis.

8. Varonis Systems, Inc. (NASDAQ:VRNS)

Number of Hedge Fund Holders: 24

Varonis Systems, Inc. (NASDAQ:VRNS) recently plunged to a new 52-week low after missing financial expectations for the third quarter and trimming its sales outlook for the full year. The weak performance compelled many analysts to downgrade the software firm.

For instance, Craig-Hallum analyst Chad Bennett on Tuesday lowered his ratings for Varonis Systems, Inc. from “Buy” to “Hold,” citing disappointing Q3 results and macro challenges. Bennett also cut his price target for the stock from $35 per share to $22 per share.

Earlier this week, Varonis Systems, Inc. posted adjusted earnings of 5 cents per share and sales of $123.3 million for Q3. The numbers were marginally below expectations.

In addition, Varonis Systems, Inc. projected annual recurring revenue in the range of $460 – $463 million for the full year, below analysts’ average estimate of $486.5 million. Moreover, it also reduced its full-year revenue guidance to a range of $470 – $473 million, from its previous projection between $485 – $490 million.

7. Qorvo, Inc. (NASDAQ:QRVO)

Number of Hedge Fund Holders: 30

Shares of Qorvo, Inc. (NASDAQ:QRVO) fell after the opening bell on Thursday, November 3. The drop came after JPMorgan turned bearish on the semiconductor stock following its second-quarter results.

JPMorgan analyst Harlan Sur lowered his ratings for Qorvo, Inc. from “Overweight” to “Underweight” and reduced his price target from $125 per share to $90 per share.

The analyst pointed towards global macro challenges and excess inventories that could hurt the company’s profitability and sales growth. The downgrade came a day after Qorvo, Inc. warned about weakness across its end markets.

Like Qorvo, Inc., analysts also downgraded Nutrien Ltd., Lincoln National Corporation and Cognizant Technology Solutions Corporation after their recent earnings.

6. Roku, Inc. (NASDAQ:ROKU)

Number of Hedge Fund Holders: 34

Guggenheim slashed its ratings for Roku, Inc. (NASDAQ:ROKU) from “Buy” to “Neutral” on Thursday, November 3, 2022. The research firm was primarily moved by the company’s lower-than-expected sales guidance for Q4.

Roku, Inc. recently projected revenue of around $800 million for the current quarter, well below analysts’ average estimate of $895.5 million. Roku stock hit a new 52-week low of $44.59 on Thursday following the weak forecast.

The California-based streaming platform issued the guidance along with its Q3 results. For the third quarter, Roku, Inc. reported a loss of 88 cents per share, narrower than the consensus forecast calling for a loss of $1.27 per share. Revenue for the quarter jumped 12 percent versus last year to $761 million, ahead of Wall Street estimates of $702.32 million.

5. Lincoln National Corporation (NYSE:LNC)

Number of Hedge Fund Holders: 34

Morgan Stanley downgraded Lincoln National Corporation from “Overweight” to “Equal-Weight” on Thursday, November 3, after the health insurer swung to a loss in the third quarter.

Lincoln National Corporation recently reported an adjusted loss of $10.23 per share for Q3, compared to adjusted earnings of $1.62 per share in the same period last year. Revenue for the quarter fell 8.4 percent on a year-over-year basis to $4.8 billion. Analysts were looking for earnings of $1.79 per share on revenue of $4.39 billion. Lincoln National shares plummeted to a nearly two-year low on Thursday following the results.

Speaking on the results, CEO of Lincoln National Corporation, Ellen Cooper, said in a statement:

“The significant charge we recorded during the third quarter and the statutory capital impact to be booked at the end of 2022 resulted from our annual assumption review primarily due to policyholder lapsation behavior in our guaranteed universal life insurance block and will contribute to a decline in our RBC ratio.”

4. Cognizant Technology Solutions Corporation (NASDAQ:CTSH)

Number of Hedge Fund Holders: 36

Shares of Cognizant Technology Solutions Corporation hit a new 52-week low of $51.33 on Thursday, November 3, following its mixed financial results for the third quarter.

The mixed performance compelled BMO Capital to cut its ratings for Cognizant Technology Solutions Corporation from “Outperform” to “Perform.” Analyst Keith Bachman thinks 2023 will be a difficult year for the IT services market due to an uncertain macro environment.

Moreover, Bachman doesn’t see any near-term catalyst for Cognizant Technology Solutions Corporation. He also trimmed his price target for Cognizant from $73 per share to $65 per share.

The downgrade came a day after Cognizant Technology Solutions Corporation posted revenue of $4.9 billion, up 2.4 percent on a year-over-year basis but below the consensus of $5.01 billion. On the bright side, the adjusted earnings of $1.17 per share surpassed estimates of $1.16 per share.

3. Stryker Corporation (NYSE:SYK)

Number of Hedge Fund Holders: 46

Canaccord analyst Kyle Rose lowered his ratings for Stryker Corporation (NYSE:SYK) from “Buy” to “Hold” on Tuesday, November 1, following the company’s Q3 earnings. Rose believes the ongoing headwinds would likely continue next year. He also cut his price target for Stryker from $225 per share to $220 per share.

The downgrade came a day after the medical technology company released its Q3 results. Stryker Corporation reported adjusted earnings of $2.12 per share, down 3.6 percent over the year-ago period and below the consensus of $2.23 per share. Revenue for the quarter rose 7.7 percent versus last year to $4.5 billion, matching expectations.

Stryker Corporation also revised its profit outlook for 2022, citing inflationary pressure. It expects adjusted earnings in the range of $9.15 – $9.25 per share, below its previous projection between $9.30 – $9.50 per share.

2. Nutrien Ltd. (NYSE:NTR)

Number of Hedge Fund Holders: 48

Shares of Nutrien Ltd. plummeted to a nearly seven-month low on Thursday, November 3, following its disappointing results for the third quarter. Referring to the latest earnings miss, research firm Scotiabank downgraded the fertilizer giant from “Outperform” to “Sector Perform.”

Nutrien Ltd. earned $2.51 per share on an adjusted basis, missing the consensus of $3.97 per share with a big margin. Moreover, the quarterly revenue of $8.18 billion also came in below the consensus of $8.78 billion.

Meanwhile, Nutrien Ltd. also lowered its full-year profit outlook amid lower potash sales volumes and weakening prices. The company now expects adjusted earnings in the range of $13.25 – $14.50 per share, well below its previous guidance between $15.80 – $17.80 per share.

1. Zillow Group, Inc. (NASDAQ:Z)

Number of Hedge Fund Holders: 51

Canaccord downgraded Zillow Group, Inc. (NASDAQ:Z) from “Buy” to “Hold” on Thursday, November 3. Analyst Maria Ripps was primarily moved by the lower-than-expected sales outlook for the fourth quarter.

Ripps believes the latest guidance represents a deteriorating real estate environment, with volatile mortgage rates affecting the customers’ buying power. The analyst also thinks the company’s estimates for 2023 are at risk given the elevated mortgage rates. She trimmed her price target for Zillow Group, Inc. from $48 per share to $34 per share.

The downgrade came a day after Zillow Group, Inc. released its Q3 results. While the tech real-estate marketplace company surpassed financial expectations for the quarter, it issued weak sales guidance for Q4.

You can also take a peek at 10 Best Monthly Dividend Stocks To Buy and 12 Best Consumer Staple Stocks.  

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This article is originally published at Insider Monkey.